A summary of trading in key commodities markets overseas:
ENERGY
Oil prices were mixed Tuesday amid rising worries that the United States and Europe could return to recession, hitting global energy demand.
New York’s main contract, West Texas Intermediate light sweet crude for delivery in October, closed at $US86.02 a barrel, down 43 UScents from Friday.
US financial markets re-opened Tuesday following a long holiday weekend with steep slumps as investors fretted about the eurozone debt crisis and fragile growth in the United States, the world’s biggest oil consumer.
The benchmark WTI futures contract had plunged more than $US3 in earlier trade before paring losses in tandem with the equity markets.
In London, Brent North Sea crude settled at $US112.89 a barrel, a jump of $US2.81 from Monday’s closing level.
Investors worried about the eurozone’s sovereign debt crisis and weak US economic data, including a dismal employment report Friday that showed no jobs were added in August.
PRECIOUS METALS
Gold jumped to a record high after Switzerland pegged its currency to the euro, before closing down as investors took profits.
Analysts said they still expect the precious metal to chart new peaks on worsening euro zone troubles.
The spot price of gold – which tracks global trades in bullion – and US gold futures set all-time highs above $US1,920 an ounce after the Swiss National Bank imposed an exchange rate cap on the soaring franc to stave off a recession. The SNB aims to keep the franc at or above 1.20 to the euro by buying other currencies in unlimited quantities.
Profit-taking pushed bullion and gold futures down more than $US50 an ounce soon after that record and prices ultimately closed lower.
At 3.35 pm EDT (0535 AEST), bullion hovered at $US1,880 an ounce, down one per cent from Monday’s late afternoon trade in New York. It was also off the record high of $US1,920.30 seen earlier on Tuesday.
US gold futures’ benchmark December contract settled at $US1,873.30 an ounce, down $US3.60 or 0.2 per cent from Friday’s close ahead of the Labor Day holiday. Earlier, December gold hit an all-time peak of $US1,923.70.
The peg knocked about eight per cent off the value of the franc against the euro. The Swiss currency had soared by a third since Lehman Brothers collapsed in 2008, as investors sought a safe haven from financial market turmoil.
Gold’s 34 per cent rally so far this year, its largest yearly gain since 1979, has been fuelled largely by investor worries over debt in the United States and euro zone.
Exchange-traded gold funds, which back investors’ money with bullion purchases, saw their holdings in gold fall by nearly 2.5 million ounces over the last month to reach a six-week low of 67.4 million ounces.
BASE METALS
Copper slipped for a third day as the US dollar rose against other major currencies and investors fretted about demand from the United States and Europe.
But expectations of stronger demand from top consumer China and supply disruptions offered some underlying support to the red metal.
Dollar gains hit copper along with other commodity prices, but fears that slower economic growth would dent demand for industrial metals weighed heaviest on prices.
Three-month copper on the London Metal Exchange (LME) closed at $US8,933 a tonne from Monday’s close of $US8,960 a tonne.
Earlier on Tuesday, the metal used widely in power and construction hit a trough of $US8,870 a tonne, the lowest in 10 days. Prices have fallen over 10 per cent from record highs of $US10,190 touched in February.
In the United States, COMEX copper futures for December delivery settled 1.66 per cent lower at $US4.0560 per lb, a 6.85 US cent decline. Earlier, the contract fell to a low of $US4.0220 per lb, a level last seen on August 25.
Global stock markets fell on Tuesday on fears the European debt crisis was worsening, which did not bode well for industrial metals.
Meanwhile, copper’s downside was limited by prospects of renewed buying from China, the world’s largest copper consumer, and potential labor strikes in Indonesia and Peru.
The prospect of more worker strikes at some of the world’s biggest copper mines could further stress an already tight supply pipeline and support metal prices.
Zinc, used in galvanizing, ended at $US2,190 a tonne from $US2,172 at Monday’s close.
Lead closed at $US2,388, down from a last bid of $US2,430.
Aluminium ended at $US2,380 from $US2,387.50. Nickel was down at $US20,675 from $US20,890.
Tin closed at $US23,875, lower than $US23,950. Reflecting new orders for LME stock, tin cancelled warrants have climbed to 11 per cent of total LME tin inventories, LME data showed.
